Congress Changes Stance on ACA Repeal and Replace

Published on: July 24, 2017

On
Tuesday, July 25, the U.S. Senate will likely vote on a “Motion to Proceed,”
which is the first step for the Senate to open debate on health reform
legislation. If the motion passes, they
may consider a 2015 bill that will repeal the Affordable Care Act (ACA) without
replacing it for two years, or the Better Care Reconciliation Act (BCRA), the
recent Senate bill to repeal and replace the ACA. There is also a possibility that the Senate could
consider the House passed American Health Care Act (AHCA). Any of these bills would reduce coverage,
raise premiums for people with pre-existing conditions, and put at risk
thousands of those with hematologic diseases and disorders that rely on
Medicaid.

The
Senate released an updated version of the Better Care Reconciliation Act (BCRA)
on July 13, legislation to repeal large provisions of the Affordable Care Act
(ACA). The modifications to the bill - that include additional funding
for opioid addiction treatment and for market stabilization, among other
changes - were an effort to win support from Republican Senators still opposed
to the previous version of BCRA. However, as of July 17, four Senate
Republicans opposed the bill, meaning the Senate would not have enough votes to
pass the legislation.

The
previous version of BCRA which was released on June 22, 2017, came two
months after the House passed version of a repeal bill (AHCA), which passed the
House on May 4, 2017. There was
speculation that the Senate bill would differ greatly from the House bill and
provide greater protections to the most vulnerable Americans – the elderly,
low-income, and those with lifelong chronic illness. However, the Senate bill does not differ
significantly from the House legislation, and ASH opposes BCRA for the same
reasons the Society opposed the AHCA, because of concerns that this piece of
legislation will reduce overall access to coverage and treatment and would
negatively impact patients with hematologic diseases and disorders.

The BCRA allows states to apply for waivers to opt out of
certain ACA requirements. While the BCRA differs from the AHCA in that states
cannot waive the community rating requirement, allowing insurers to charge
higher prices to individuals with pre-existing conditions, the Senate bill does
allow states to define the essential health benefits (EHBs), which include 10
categories of benefits such as hospital care and prescription drugs. EHBs ensure access to broad coverage, and
many important patient protections in the ACA only apply to services defined as
EHBs, including the elimination of annual and lifetime limits. Changes to EHBs would seriously undermine the
ban on lifetime and annual caps and the annual maximum for out-of-pocket
expenses. Additionally, under the ACA, if a state chose to waive a certain
requirement, it had to ensure that coverage remain as generous, the same number
of people are covered, and out-of-pocket costs are no higher. The BCRA removes
these safeguards.

Under the ACA, states that chose to expand the Medicaid
program, received and are still receiving enhanced federal funding to assist in
the coverage of a broader Medicaid population. However, under the BCRA,
beginning January 1, 2020, these increased payments will begin to be phased-out
and will be fully eliminated by 2024. Additionally, the Senate legislation,
similar to the House bill, will convert the Medicaid program to a per capita
allotment or a block grant system – leaving the choice up to the states. The AHCA adjusts each state’s targeted
spending amount by the percentage increase in the medical care component of the
consumer price index (CPI). However, the
Senate bill uses the same inflationary adjustment as the House until 2025 but
then switches to the less generous CPI for all urban consumers. These changes would make it more difficult
for states to respond to fluctuations in the price and demand for health care
services.

The BCRA does away with the ACA subsidies, which were
adjusted by income and location, and replaces them with income-based tax
credits. While this is an improvement
over AHCA, which linked the tax credits solely to age, the BCRA’s tax credits
are less generous than the subsidies offered through the ACA, restricting
eligibility to people with incomes not exceeding 350 percent of the federal
poverty level, a reduction from the 400 percent cap under the ACA. Furthermore,
the Senate bill would allow states to increase the age rating ratio from 3:1 to
5:1, significantly increasing the cost of coverage for older Americans. The
legislation repeals the controversial individual and employer mandates, as well
as the tax provisions, which were included in the ACA to finance the Medicaid
coverage expansion. The AHCA replaced
the individual mandate with a provision that required individuals with a lapse
in coverage longer than 63 days to pay a penalty equal to 30 percent of their
insurance premium for a year. The BCRA
includes a provision which would make those who had a lapse in coverage for 63
days or more wait six months before obtaining insurance.

ASH is also concerned about the bill’s proposed elimination
of the Public Health and Prevention Fund which has supported many critical
projects at the Centers for Disease Control and Prevention (CDC), including
investments in immunizations and health-care associated infections. Currently
the Fund comprises approximately 12 percent of CDC’s budget and should be
preserved.

The Congressional Budget Office, responsible for reporting
non-partisan cost estimates for proposed legislation, has released scores for
each version of health reform legislation currently being considered by the
Senate. While each version will decrease the federal deficit, each will also significantly
increase the number of uninsured Americans over the next decade.